Avanse Financial Services Ltd, an education-focused non-banking lender, on Thursday announced an investment of ₹800 crore from homegrown private equity (PE) firm Kedaara Capital to fuel its growth plans.
Avanse Financial provides education-focused loans to students, professionals and institutes in India. The company, founded in 2013, claims to have catered to about 3 lakh academic aspirants across more than 3,000 institutes in over 50 countries. It has provided growth and working capital to more than 1000 educational institutes.
As of December 2022, the non-banking lender had INR 8000 crore of assets under management. The company disbursed loans worth INR 4,850 crore during the first nine months of financial year 2023 , about 2.5 times compared to the same period last year. “We look forward to using our operational expertise and experience in the financial services space to help them realise their long-term vision," said Sunish Sharma, managing partner and co-chief executive, Kedaara Capital. Mumbai-based Kedaara Capital has invested in companies like AU Small Finance, Veritas Finance, Aavas Financiers Limited (formerly known as Au Housing Finance) across its three funds in the financial services space. It also has companies like beauty ecommerce platform Purplle, hospital chain ASG Eye hospitals in its portfolio.
Existing backer global PE firm Warburg Pincus will continue to be the majority shareholder in Avanse.
The company said it will use the funds to expand its presence and outreach to a larger number of Indian students, the company said in a statement.
“Avanse is at an exciting phase of growth. As the world recovered post the pandemic, we witnessed a significant resurgence of students seeking higher education at international locations." said Amit Gainda, Managing Director and chief executive Avanse Financial Services.
“The growth capital will enable us to strengthen our brand proposition, integrate digital solutions and innovate to build more depth into our product range as we work towards delivering greater stakeholder value," he added.
“The fresh primary infusion will significantly improve the company’s capitalisation, providing a strong base for future growth," said Kartikeya Kaji, managing director, Kedaara Capital.
The latest investment from Kedaara comes a few months after capital infusion from Warburg and IFC, the private investment arm of the World Bank, in September 2022, when it raised ₹390 crore (INR 48.7 million). Warburg had first invested in the company, when it bought an 80 percent stake in Avanse from Wadhawan Global Capital Ltd and its unit Dewan Housing Finance Corporation Ltd (DHFL) in March 2019.
New York-headquartered Warburg has an active portfolio of more than 260 companies with more than $85 billion in assets under management. In India, the company has invested in startups like boAt, Ola, The Good Glam Group, among others.